New Delhi, May 6 — India and the United Kingdom on Tuesday formally concluded negotiations on a landmark free trade agreement (FTA) that is set to reshape the contours of bilateral commerce, significantly slashing duties on key goods while opening new avenues for services and investments.
Prime Ministers Narendra Modi and Keir Starmer jointly announced the agreement, which both leaders described as a major breakthrough in India-UK economic ties.
The deal also covers a Double Contribution Convention to ease social security obligations for professionals moving between the two nations.
“In a historic milestone, India and the UK have successfully concluded an ambitious and mutually beneficial Free Trade Agreement, along with a Double Contribution Convention,” Modi said in a post on X.
He added, “I look forward to welcoming PM Starmer to India soon.”
Calling it the UK’s most significant trade pact since Brexit, Starmer remarked, “This is the biggest deal the UK has done since leaving the EU and the most ambitious India has ever done.”
Key Tariff Reductions and Market Access
Under the terms of the agreement, India will cut duties on British Scotch whisky and gin from 150 percent to 75 percent initially, with a further reduction to 40 percent by the tenth year of implementation.
In a major concession on automobiles, tariffs on UK-made cars will be brought down from over 100 percent to 10 percent, though subject to a quota system.
The UK, in turn, will eliminate tariffs on nearly 99 percent of product categories—representing almost all of the current trade value—which is expected to benefit Indian exports such as textiles, garments, leather goods, and other manufactured products.
The Department for Business and Trade (DBT) in London noted that other UK products like medical devices, lamb, and advanced machinery will also benefit from reduced tariffs.
The agreement is expected to double bilateral trade between the two countries—currently valued at GBP 41 billion—by 2030. Official estimates suggest the FTA could add GBP 25.5 billion to annual bilateral trade and contribute GBP 4.8 billion to the UK economy by 2040, while also increasing British wages by GBP 2.2 billion annually.
Mobility, Professionals, and Social Security
India has secured concessions on professional visas, including the addition of chefs, musicians, and yoga practitioners to UK visa routes. While the UK clarified that it would not alter its overall immigration policy, it agreed to streamline business mobility procedures.
One of India’s longstanding concerns—double social security contributions—has been addressed through the Double Contribution Convention. The agreement ensures that professionals working temporarily in either country will not be required to pay into both nations’ social security systems, reducing financial and procedural burdens.
While the FTA and social security agreement have been finalized, negotiations on a separate bilateral investment treaty remain ongoing. Both sides expressed optimism about reaching a conclusion soon.
The wide-ranging deal marks a pivotal chapter in India-UK ties and is seen by both governments as a springboard to closer economic integration. As Starmer put it, “This agreement shows what a confident, outward-looking Britain can achieve.”
